Nine Reasons to "SOI"
1. Generating business from your Sphere of Influence is fun. A good SOI business model includes lunch dates, housewarming parties, afternoon BBQs, friendly email exchanges, cocktails and football games. Conversely, mass marketing to strangers involves stuffing envelopes, paying for postcards, licking stamps, disturbing day-sleepers, shaking off rejection and designing newspaper ads.
2. Generating business from your Sphere of Influence is relatively cheap. Getting your SOI campaign up and running will cost you a few pennies, but no where near what you'll spend promoting yourself to strangers. You'll probably need to design, print and mail a newsletter or two, which might run you around $500 depending on the size of your SOI. You'll probably do Christmas cards and send out some cute "Spring Forward!"-type postcards a few times a year. You might create some high quality magnets and implement a strategy to encourage referrals. You might want to send birthday and anniversary cards, and to invest in a good website and email stationary.
But otherwise, all the money you spend marketing to your SOI will be used on entertainment! Hot wings and beer on Sunday afternoon! All-you-can-eat jumbo shrimp at your house on Friday night! Sushi and sake after work with your best friend!
3. Implementing an SOI business model encourages good habits. When you commit to developing and maintaining a contact database, you're always aware of the new people that you meet. You remember to ask for and write down their contact information, and to input it into your management system. Because the success of your business depends on keeping your SOI current, you tend to be more vigilant with updates (even if you aren't perfect).
You don't forget about the nice lady you met last week at your friend's pool party who said she'd like to talk to you about buying an investment property. You can even find her phone number!
4. An SOI business model minimizes rejection. I don't think anyone, even the most outgoing, charismatic sales dynamo enjoys rejection. Sure, maybe you can develop a knack for shaking it off, but rejection hurts, even if only for a moment. And when you market yourself to strangers, you encounter rejection all the time. Even if it's nothing more than a lack of response to your expensive advertising, it's disappointing and discouraging.
When your business is made up mostly of people who know you, or who were referred to you, you are rarely rejected. You may not get every piece of business that crosses your path, but when you don't, it's usually for a reason other than a lack of salesmanship.
5. An SOI business model increases your accountability. When you are working with friends or referrals, you want to do a GREAT job! Contrary to what some might believe, you won't be tempted to let things slide just because you have a personal relationship with this person. You will want to impress them and even show off a little. This is good. When you do an exceptional job for one client, you've raised your own bar a little and will feel the need to do as good a job for the next... and even better for the next. Before you know it, you're an extraordinary real estate agent!
6. Business generated from your SOI is easy business to get. If your friends and your friends' friends think you're a competent real estate agent (or even just a generally competent person), "interviews" will be a slam-dunk. You'll rarely have to compete for listings and buyers; they're already predisposed to hire you.
7. Business generated by your SOI tends to be better business. Assuming that the people you know are people you respect and would like to do business with, it just makes sense that the business generated by them will also be business you'll enjoy. On the other hand, people who wander into a real estate office, visit an open house, or answer a newspaper ad may not be as qualified, motivated or loyal as you would like. Agents who depend on such marketing venues often find themselves working with buyers and sellers who aren't ready to move, or who are working with several different agents around town.
8. Once your SOI is "built," you can coast through the rest of your real estate career. Sure, your SOI will need ongoing maintenance, but you'll never have to do another day of prospecting. If you spend your first 4 years building a truly great SOI, it will take care of you the rest of your days. In the last five years of my career, I relied solely on business generated by my SOI. Thus, my personal promotion expenses were next to nothing and all my working hours were devoted to my (many) clients. I was able to make a six figure income working less than 30 hours a week. It was a beautiful thing.
9. And finally... and most importantly.... An SOI business model WORKS. It just does. The people who know you and care about you really want to help you. Truly, they do. They are much more likely to remember your name when the topic of real estate comes up in conversation and they are certainly more likely to put in a good word for you.
copyright Jennifer Allan 2007